Thursday, January 10, 2008

The Problem Won't Go Away If We Close Our Eyes

Those are our options in the face of any problem. Perhaps an example of a problem that has yet to hit North American shores will help us to see this behaviour before it starts. India has offered up just that problem. Indian automaker Tata has announced plans for the late 2008 release of the Tata Nano, a car that will cost $2500. That's right, a brand new 4 door, 5 seater that will cost $2,500.00. How is this a problem?

It's a problem because Ford and GM face labour costs of roughly $71 per man hour, which resulted in Ford losing $12.6 Billion last year. They don't expect to make money again until 2009. India, on the other hand, can hire engineers who oversee the most intricate of details, for $35 an hour.

So what are the real problems here? The most immediate is that we are getting killed in the auto market. In 2005, auto sales and parts were nearly 15% of the USA's $1.49 Trillion GDP. In addition to the mortgage and lending crisis and economic downturn that is already happening....

If Ford and GM cannot cut labour costs by 30% in the next year to 2 years (to $50 per man hour), production of these cars will have to be shipped to Latin America. This will cost jobs, and encourage greater outsourcing of other labour in other industries which is all pointing us full steam in to one inevitable conclusion...

You are lucky to have a job. There is a reason doctors from other countries who don't have liscence to practice medicine here drive cabs and work in conveniance stores. They know the ability to work and receive a wage is a priveledge, not a right.

We have forgotten that as a society, and have placed so much emphasis on consumerism and being cool, that the rest of the world is not just catching up... they are leaving us in their dust. Stick your head in the sand, choose to avoid the news, discount what you are reading right now, but it's the truth...

Our problems won't go away by avoiding them or numbing ourselves... if we hope to overcome these challenges as a society, then our leaders will have to demand more of us, and we will have to demand more of ourselves. More time on task, fewer unions, and out with 'trying to keep people'. When businesses are shutting down (which they are) creative employee incentivization is at the bottom of the list.

This may sound harsh, and we at swim upstream believe in going over and above to reward your hard working employees... but we also believe in dumping the trash. As a nation, we have put every union in place and gone through strikes and holdouts to give more money and less expectation. It is exactly that mentality that is killing GM, Ford, Air Canada, and countless other companies.

If you are working you ass off right now, this message is not for you. If you are that girl or that guy who is working their tail off, you also don't need a union, because you are no threat for termination - ever.

But to the lazy clock-punching snack-munching time-wasting theif of an employee... your time is coming where you have proved yourself expendable. Better end your 45 minute coffee break now and learn from your better example co-workers... because there is no more room left in a competitive world for people like you.